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Sterling Losing Streak, Risk-on and fingers Crossed for Trade Deal Signing. EUR/USD, GBP/USD, USD/JPY

Jan 14 2020, 06:25 PM (+06) |


EUR/USD on a Daily TF had a bullish correction and reached 1.11470. The pair met resistance at the 50% Fibo level and local trend line down. The move is mainly due to risk-on sentiment and the Phase One trade agreement signing between the United States and China that’s set to take place tomorrow in Washington.

Technically: The price is using the 13 EMA as resistance. The 48EMA is pointing slightly up. The MACD bearish histogram decreased. The Parabolic SAR is pointing down. If the price makes a break above 50% Fibo, it may bring the price up to 61.8% Fibo around 1.12086, but the potential is limited.

Macroeconomic releases are limited. Pay attention to U.S. CPI today at 1:30pm GMT. The main focus remains on the trade deal signing.

Resistance: R1 1.11750, R2 61.8% Fibo 1.12086.

Support: S1 48EMA 1.11075, S2 38.2% Fibo 1.10827, S3 1.10590.

GBP/USD on a Daily TF continues its bearish descent. Prime Minister Boris Johnson met with the European Commission’s Ursula von der Leyen for Brexit negotiations. The Brexit deal passed the House of Commons and now we are waiting for approval from the House of Lords and they are not expected to challenge it. PM Johnson mentioned that he thinks it’s ‘enormously likely, epically likely’ that they will reach a comprehensive trade deal with the EU. One of the things being discussed now is fishing rights for EU citizens in UK waters.

Technically: The price moved below the 48EMA and is using it as resistance. The Parabolic SAR has reversed and is pointing down. The bearish MACD histogram is increasing. The price met support around 1.29500, and as we mentioned yesterday, wait for a break of this level down to open short positions.

Resistance: R1 13EMA 1.30620, R2 50% Fibo 1.31675.

Support: S1 38.2% Fibo 1.28821, S2 1.28, S3 1.27.

USD/JPY on a Daily TF just about reached our next resistance target. The price reached 110.214. The price smoothly crossed resistance at 109.900 and came back to retest it as support. The pair is currently trading at around 110.022. 13 and the 48 EMA is pointing up. The Parabolic SAR is pointing up. The bullish MACD histogram is increasing. Once Phase One of the Trade agreement is officially signed tomorrow by China and U.S., the pair may extend higher.

Resistance: R1 110.214, R2 110.698, R3 111.069.

Support: S1 109.900, S2 109.624, S3 109.362.

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